QUANT SYSTEM TRADE UPDATE - 27.09.21

From the desk of Capt.D.Ganesh Raja

Dear Friends,

It has been a hectic weekend and hence couldn’t update the blog. This is based on last Friday’s close and I am not taking into account today’s market action.

Quite a few friends are just baffled by the market rise and some are plain irritated. Let me quote what I had written on 27.08.21. I had said “So, people who are deciding market exposure based on historical PE ratios might be in for unpleasant surprise. Justifying irrational exuberance in the market also is a folly but the scenario is not that now.”

Nifty was at 15435.85 when I wrote this and it is at 17855.10 now and of course Sensex touching the magical figure of 60000, first time in history.

Markets care two hoots about what anyone’s analysis is. It will reward you when you are tuned to it and punish you when you are not in tune. That’s why some great trader has said “All are made equal in the eyes of the market. It doesn’t care if you are a PhD holder or a school dropout”.

I might sound boring but I have nothing much to add to last week’s blog because still there no indication of a correction in markets. In the daily charts, Nifty is nearing upper end of the channel with a target of 18070, so let us hold positions and watch the market action. There is an early indication that an expanding top, with a target of 18070.0, might be forming in daily charts but I don’t want to predict about it. Generally expanding tops indicate excessive exuberance presenting a difficult atmosphere to trade.

In informed circles there is lot of talk going on about Evergrande crisis in China might be brewing into a major financial crisis world over and there are many more doomsday stories going around. Of course, it is not in my capacity to delve into it and give a view. I will stick to what I know.

As far the existing recommendations are concerned, if some short-term traders feel they have to take some profits, they can do so but I will update only if the system gives an exit. System demonstration is one of the principal aims of this blog.

Note for reading this report:

Note1: The stop losses are on end of day basis

Note2: When trade recommendation is given around a certain price, it means that the trade may be taken the next trading day or if a price zone is given for taking a trade then trade has to be taken on the day price reaches within that zone.

Note3: A separate excel sheet is attached to view the performance of the recommendations, which also reduces the task of individually reporting the performance of each trade recommendation. Viewing the excel sheet “TRADE RECOMMENDATION LOG” will be self-explanatory. Also in this sheet Trade recommendations which are still active are marked.

When signals are triggered mid-week, that is updated in log sheet and covered in the weekend report , due to paucity of time.

MARKET & NIFTY OVERVIEW

Nifty: LAST CLOSE – 17853.20. System gave long signal in on 12.08.21 at 16364.0. Continue holding long positions. Short term traders can keep a profit protection stop at 17640.0 but positional traders can continue holding position.

Targets – Targets have been long achieved but I have been updating regularly to hold position based on system readings. Leverage 1.0x

Minor trend: Up, Intermediate trend – Up, Long term trend – Up.

GOLD: No views for now.

SILVER: No views for now.

EXISTING TRADE RECOMMENDATION OVERVIEW

1. ACTION CONSTRUCTION: LAST CLOSE – 261.05. System gave a buy signal on 27.06.21 at 236.0 with stop loss at 198.35 and presently at an absolute profit of 10.61%. Continue to hold long position, since trend is in progress.

Target 1 : 300.0, Target 2 – 320.0, Target 3 – 380.00, Leverage – 0.1x

Minimum profit potential – 27.1% . Asset allocation profit potential – 2.7%.

Minor trend: Neutral, Intermediate trend – Up , Long term trend – Up.

2. INDIANS HOTELS: LAST CLOSE – 178.96. System gave a buy signal on 27.06.21 at 144.95 with stop loss at 131.35 and presently at an absolute profit of 23.42%. Target 1 was achieved on 23.09.21 but continue to hold long position. If it were my personal account I would have added to the position. In 02.01.2008 the stock had hit 162.40 and on 21.09.21 it took that level out with a close of 162.46! What a wait!! There might be trader’s remorse with a slight dip but one should not bother much about it.

Target1 – 179.0 (Achieved), Target 2 – 229.0, Leverage 0.05x.

Minimum profit potential – 23.5% (Achieved). Asset allocation profit potential – 1.20%.

Minor trend: Up, Intermediate trend – Up, Long term trend – Up.

3. L&T: LAST CLOSE – 1768.75. Recommended to go long around 1596.0 levels on 29.07.21with stop loss at 1560.04 and presently at an absolute profit of 10.82%. Continue to hold long position.

Target1 – 1675.0 (Achieved), Target 2 – 1798.0, Leverage 0.20x.

Minimum profit potential – 4.9%. Asset allocation profit potential – 1.0%.

Minor trend: Up, Intermediate trend – Up, Long term trend – Up.

4. GAIL: LAST CLOSE -152.60. Recommended to go long on 12.08.21 at 150.65 with stop loss at 139.15 and presently at an absolute profit of 1.29%. Continue to hold long position.

Target1 – 171.0, Target 2 – NA, Leverage 0.20x.

Minimum profit potential – 13.5%. Asset allocation profit potential – 2.7%.

Minor trend: Up, Intermediate trend – Up, Long term trend – Up.

5. HDFC LTD.: LAST CLOSE – 2839.0. Recommended to go long on 12.08.21 at 2668.75 with stop loss at 2578.10 and presently at an absolute profit of 6.38%. Continue to hold long position.

Target1 – 2827.0 (Achieved), Target 2 – 2950.0, Leverage 0.20x.

Minimum profit potential – 5.9% (Achieved). Asset allocation profit potential – 1.2%.

Minor trend: Neutral, Intermediate trend – Up, Long term trend – Up.

6. RELIANCE INDUSTRIES: LAST CLOSE – 2482.70. Recommended to go long at 2110.0 on 12.08.21 with stop loss at 2003.0 and presently at an absolute profit of 17.64% having long achieved the target. Continue to hold long position. It seems poised for a stellar run further.

Target1 – 2210.10 (Achieved), Target 2 – 2300.0 (Achieved), Target 3 – 2850.0, Leverage 0.20x.

Minimum profit potential – 4.7% (Achieved). Asset allocation profit potential – 0.94%.

Minor trend: Up, Intermediate trend – Up, Long term trend – Up.

7. BAJAJ FINANCE: LAST CLOSE – 7793.40. Recommended to go at 6966.50 on 29.08.21 with stop loss at 6836.20 and presently at an absolute profit of 11.87%. Continue to hold long position.

Target1 – 7595.0, Target 2 – 8297.0, Leverage 0.20x.

Minimum profit potential – 9.0% (Achieved). Asset allocation profit potential – 1.80%.

Minor trend: Up, Intermediate trend – Up, Long term trend – Up.

NEW TRADE RECOMMENDATION

NONE

TOTAL LEVERAGE OF ABOVE NEW TRADE RECOMMENDATIONS: NA

COMBINED PROFIT POTENTIAL FOR ABOVE TRADES: NA

TIME WINDOW OF TRADES: NA.

TOTAL LEVERAGE INCLUDING UNCLOSED POSITIONS AS PER PREVIOUS RECOMMENDATION: 2.15X

RETURNS TILL DATE SINCE 04.07.20 : 62.03% (AS OF FRIDAY 24.09.21 CLOSING)

TRADE RECOMMENDATION LOG.pdf

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